China launched a two-year crackdown on illegal cross-border securities, futures, and fund trading on May 22, aiming to clamp down on unauthorized offshore investment services and brokerages that offer mainland investors access to overseas markets [1, 2, 3]. The campaign targets illegal activities that violate Chinese laws, disrupt market order, and harm investors [1, 3].
The China Securities Regulatory Commission and seven other government agencies, including the central bank, jointly announced the campaign with approval from the State Council [1, 2, 3]. The authorities said the crackdown sets a two-year grace period during which firms must wind down illegal operations; investors may only sell existing holdings and withdraw funds but cannot make new investments [1, 2, 3].
Brokerages Tiger, Futu, and Longbridge are specifically named for soliciting business in China without an onshore license and will face penalties [1, 2, 3]. Shares of Tiger’s parent company UP Fintech and Futu Holdings fell sharply in pre-market trading following the announcement [2, 3]. A Tiger spokesperson said the company "has always placed compliance as a top priority" [2]. At the end of Q1 2026, Futu’s mainland investor customer base accounted for 13% of its total users [2].
The crackdown also targets domestic entities aiding illegal operations, including intermediaries, software providers, and platforms promoting unauthorized services [3]. Authorities will enhance inspections for violations related to foreign exchange controls, anti-money laundering, cybersecurity, and personal data protection [3]. Banks facilitating cross-border investments will face intensified scrutiny and stricter compliance checks on outbound foreign exchange transactions [3].
The campaign is designed to stop the expansion of illegal offshore securities trading networks and ensure mainland investors operate within approved regulatory frameworks [1, 3]. The two-year wind-down period begins immediately and will be closely monitored by authorities [1, 2, 3].
